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MNCN, SCMA shine amid surging TV advertisement

The country’s growing media spending, particularly on TV advertisements, provided a boost for media conglomerates’ top and bottom lines during the January-September period of this year

Khoirul Amin (The Jakarta Post)
Sat, November 1, 2014

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MNCN, SCMA shine amid surging TV advertisement

T

he country'€™s growing media spending, particularly on TV advertisements, provided a boost for media conglomerates'€™ top and bottom lines during the January-September period of this year.

Media giants PT Media Nusantara Citra (MNCN) and PT Surya Citra Media (SCMA) booked revenue increases of 7.2 percent and 14.4 percent, respectively, in the first nine months of the year.

MNCN rounded up the nine-month period with Rp 5.04 trillion (US$417.4 million) in revenues, a surge from Rp 4.7 trillion in the same period last year, according to the firm'€™s financial report published on Friday.

MNCN finance director Faisal Dharma Setiawan said previously that his firm would focus on its free-to-air TV stations, namely RCTI, Global TV, MNC TV, to help boost the firm'€™s revenues.

'€œNext year, we will continue to focus on strengthening [the business of] our free-to-air TV stations,'€ he said.

TV advertisements boosted MNCN'€™s revenues, pocketing Rp 4.5 trillion in the nine-month period that ended in September this year, up 7.1 percent year-on-year (y-o-y).

Revenues from printed media advertisements, meanwhile, shrank by 23.6 percent to Rp 143.2 billion from Rp 187.4 billion.

Besides its free-to-air and pay TV stations, MNCN currently produces a number of printed media, including Koran Sindo, Genie and Highend.

Increased revenues driven by TV advertisements were also experienced by another media giant, SCMA.

SCMA, which operates free-to-air station SCTV, booked higher net revenue growth of 14.4 percent to
Rp 3.09 trillion in the first nine months of this year from Rp 2.7 trillion in the same period last year.

The company'€™s advertising revenue stood at Rp 3.8 trillion, a 15.2 percent increase from Rp 3.3 trillion.

The high advertising revenue increase compensated surging program expenses, which stood at
Rp 1.07 trillion during the January-September period of this year from Rp 873.7 billion y-o-y.

SCMA, which also runs online news portals, booked a net profit of Rp 1.1 trillion, a 13.3 percent y-o-y increase from Rp 970.5 billion.

Reza Priyambada, an analyst with Woori Korindo Securities, said that the two firms'€™ revenue growth rates were considered moderate.

'€œFrom the [media] industry association, the media industry is expected to grow by between 15 percent and 17 percent this year,'€ he said.

Reza said he was upbeat that the industry would continue to grow in the future.

TV advertisements would continue to be a revenue booster for media firms, but they would also need to prepare for the digital advertising era, he said.

Meanwhile, a study by advisory firm Redwing showed that free-to-air TV advertising still dominated the country'€™s total media spending, surpassing that of digital advertising.

The study found that TV advertising dominated with around a 70 percent share of the country'€™s total media spending last year, while digital advertising only represented 5 percent.

'€”JP/Khoirul Amin

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